Keeping Staff in the Dark Can Be Destructive

Credit Union Magazine
April 9, 2010 | COMMENTS

Employees need and deserve the truth and if you don't give it to them, they'll make up their own version of it.

That's the word from Quint Studer, author of “Straight A Leadership: Alignment, Action, Accountability.” He says many employees are anxious and distracted, either hiding out in their offices or aggressively vying for credit in an attempt to shore up their positions in the organization. That's because staff are worried about their jobs and the financial health of their employers.

This raises the question of how much to tell employees about what's happening behind the scenes. The answer, Studer says: The more the better. “It's the right thing to do and it's good for business,” he explains.

Studer offers 10 reasons why companies should embrace transparency:

1. People assume the worst when they hear nothing. Silence from the executive suite causes fear and resentment, which doesn't create a productive culture. The news might be bad, but it's likely not as bad as staff imagine. If it is, employees can plan accordingly.

2. Transparency helps employees connect to ‘why.' When employees work in a vacuum, they can't see the financial big picture, and decisions leaders make may seem ill-advised, unfair, or inexplicable. Transparency connects staff to the why—and that understanding propels them to act.

3. Transparency creates understanding. Employees and mid-level managers may not understand how the external environment affects the company. “Creating a transparent company helps everyone stay mindful of the forces affecting the bottom line,” Studer says.

4. Consistent messaging. Keeping staff informed prevents people from getting speculative, often distorted, news through the company grapevine. They hear what's really going on, in a controlled and consistent way, from their managers. Studer says companies should train managers to use certain “key words” to ensure all employees hear the same messages positioned in the same way.

5. Organizational consistency. When everyone hears the same messages from their leaders, everyone is motivated to respond in similar ways. This consistency trickles down to the customers, who get the same basic experience regardless of who they're dealing with. “Consistent companies tend to be healthy, stable companies,” notes Studer. “And transparency and consistency are two sides of the same coin.”

6. Faster, more efficient execution. When times are tough, execution is everything. And the ticket to good execution is good alignment: All sectors of an organization must understand exactly what's required so they act in a coordinated and collaborative fashion. Transparency facilitates that kind of alignment by creating a shared sense of urgency.

7. Not as much “we/they” divisiveness. Studer warns clients about the “we/they” phenomenon—the perception that there are separate groups inside a company that work at cross-purposes (staff vs. management, or this branch vs. that branch). Transparent organizations share common agendas, making it harder “we/they” to flourish.

8. Employee retention. High performers don't thrive in an atmosphere of secrecy and uncertainty. They want to work for a company that treats them with respect and values their problem-solving skills. “Obviously, your hardworking innovators are the very people you want to hold onto in times like these,” says Studer. “Make sure your culture nurtures them.”

9. No more ‘park ranger' leadership. If you were lost in the woods a few times and a park ranger always showed up and led you to safety, you wouldn't develop survival skills. You wouldn't have to. The same is true of employees who wait for their heroic park rangers (senior leaders) to lead the organization out of the economic wilderness. This mindset breeds complacency.

10. It facilitates the best possible solutions. In transparent cultures, leaders encourage employees to solve problems themselves. And because those employees are the people closest to problems, and because they must live with the outcome, they almost always design the most effective, efficient solutions.

“That's what employee ownership really means,” Studer reflects. “When people are allowed to solve their own problems, they'll do a much better job than if they have to work with a solution imposed from above or outside. And they'll also have instant buy-in.”